10th Sep 2024 12:19
(Alliance News) - Centamin PLC on Tuesday agreed to a takeover from a larger Johannesburg-listed peer, in a deal which could leave pure-play gold miners scarce on the London Stock Exchange.
Centamin operates the Sukari gold mine in Egypt, while AngloGold mines in Brazil, Democratic Republic of Congo, and Tanzania.
Under the terms of the proposed deal, Centamin shareholders will receive 0.06983 of a new AngloGold share and USD0.125 in cash for each Centamin share.
The deal values Centamin issued share capital at GBP1.9 billion.
The transaction values Centamin shares at 163 pence, based on the closing price of USD28.80 per AngloGold share on Monday. The AngloGold offer represents premium of 37% to the closing price of 119.50p per Centamin share on Monday.
Centamin shares were 25% higher at 149.04p each in London on Tuesday morning. It has a market capitalisation of GBP1.73 billion.
AngloGold shareholders will own 83.6%, and Centamin shareholders 16.4% of the merged company.
The acquisition is subject to Centamin shareholder and regulatory approvals. Centamin directors will unanimously recommend the deal to shareholders.
"This transaction is an endorsement of Centamin's achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian government has taken important steps to attract foreign investment to develop the country's significant geological potential," Centamin Chair James Rutherford said.
The takeover is expected to complete during the fourth quarter.
"A takeover of Centamin represents the end of an era for mid and large-cap gold miners on the UK stock market," AJ Bell analyst Russ Mould commented.
"Centamin is one of the last pure-play gold producers remaining on the London Stock Exchange. While there are plenty of tiny exploration companies hoping to strike it rich, few have enjoyed Centamin's level of success and built a large-scale operating mine. Over the years, gold producers of any notable scale have been snapped up by rivals or merged with others, leaving investors with limited options on the London Stock Exchange and effectively making them look at overseas stock markets for a broader range of gold miners.
Mould continued: "Names like Randgold Resources, once a FTSE 100 constituent, are now long gone from London and, if AngloGold Ashanti is successful in buying Centamin, it would leave Endeavour Mining as the only big primary gold producer left on the UK stock market, along with silver producer Fresnillo which also digs up gold."
By Eric Cunha, Alliance News news editor
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